FY2016/17 Budget Estimates as read by the Cabinet Secretary, Henry Rotich will lead to difficult economic times for the ordinary Kenyan.

The cost of living is set to rise significantly with the introduction of excise duty on kerosene which is used by nearly 70% of Kenyans. The explanation that the tax is intended to addresses the issue of adulterated kerosene is in itself an indictment of the government institutions charged with the role of ensuring proper standards and quality for goods and services in our markets. Already majority of Kenyans are struggling to make ends meet and this move will only serve to exacerbate the situation.
The situation will be made worse by the increment of road maintenance levy by Sh6 which will result to high costs of food, transport and the cost of doing business will definitely go up leading to potential job lay-offs. We are looking at very grim times for the ordinary Kenyan. The relief that will be created by the exemption from taxation of bonuses, overtime and allowances of low income earners will be wiped out by the kerosene and road maintenance levy taxes.

We welcome the move to enhance access to public services by facilitating the establishment of Huduma Centers in all the 47 Counties. We urge the government to facilitate adequate public sensitization regarding the centers and the services provided therein to ensure their optimal use.
The move to bridge the housing deficit gap by reducing the corporate tax from 30% to 20% for property investors who build over 1,000 houses is laudable. However the middle scale property investors who are the majority also need to be given incentives to invest more in building houses as this will accelerate the bridging of the housing deficit.

We note the Government commitment to support devolution by increasing allocation to Counties to Sh.304B. However, many Counties are grappling with absorption capacities owing to complex nature of the e-procurement system - the Financial Management Information Systems (IFMIS). We hope that adequate infrastructures will be put in place to ensure that the challenges bedeviling the system are addressed and enhance fund absorption by the Counties.
The Sh.21B allocation to National Youth Service is a demonstration of government’s commitment to address youth challenges. However, we would like to see bold and deliberate steps towards addressing structural and system weaknesses that led to the loss of funds from NYS through corrupt dealings. As it is, there is no guarantee that the allocation to NYS will not find its way to the pockets of individuals.

We welcome increased allocation to security, agriculture and education sectors. Overall, the budget appears to have been made with next year’s elections in mind as there appears to be some urgency in pushing through some of the pledges government made but have not been able to facilitate their implementation. The ordinary Kenyan has not been properly cushioned from harsh economic realities. We hope that the necessary adjustments will be made before the proposals are approved by Parliament and the Finance Bill assented to. 

Henry Ochieng
Chief Executive Officer